Video 16:34
Election called early to put focus on policy

Finance Minister Penny Wong says the Prime Minister made an early announcement on the election date so that media and public attention will be on policy rather than election speculation.

Transcript

TONY JONES, PRESENTER: Earlier tonight I spoke with the Finance Minister, Penny Wong. She was in our Melbourne studio.

Penny Wong, thanks for joining us.

PENNY WONG, FINANCE MINISTER: Good to be with you.

TONY JONES: Now, no prime minister has ever announced an election this far out. And so, was this a symbolic move by Julia Gillard to prove that she's actually in charge?

PENNY WONG: No, I think this is a decision by the Prime Minister which is all about trying to get the focus less on process and more on policy. Certainly last year I think maybe - this isn't the case for you, Tony, but I suspect most of the people watching this got heartily sick of the politics last year not being focused on things that were relevant to them, things about the future of the country, plans for disability, plans for education.

These are the important things and the Prime Minister by announcing the election date has said, "Look, no speculation is needed. We don't need any fevered speculation on process stories. What we do want is a focus on plans for the future of the country."

TONY JONES: Does naming the election date lock in Julia Gillard's leadership even if, for example, the primary vote were to slip back below 30 per cent?

PENNY WONG: Oh, look, the Prime Minister has made this decision for very sound reasons which are about trying to ensure for the good of all of the nation, regardless of which way you vote, there's actually a focus on your plans for the future and your costings, your savings to deliver those plans.

PENNY WONG: Oh, well, I think Joe Hockey wants to talk about anything other than his costings and savings policies. The reality is that he and Tony Abbott talk a lot about real solutions.

Well, a real solution is no solution unless you have some plans and you have a credible funding strategy. And this particular leadership team from the Coalition has yet to put forward since the last election any credible savings and any credible costings. The only thing they have on their record is an $11 billion black hole from the last election.

TONY JONES: But there wouldn't be very many Labor backbenchers who weren't aware of the Fin' Review's poll this week of 54 marginal seats which predicted a 4.8 per cent swing against the Government, the loss of 18 ALP seats. That must surely have sent shockwaves through the caucus. At a time like that, Prime Minister's tend to shore up their leadership.

PENNY WONG: Well, Tony, there are always lots of polls and I think you've asked me a question about polls, other people ask me questions about polls. The only poll that really counts is the one on election day. And I think Australians are entitled to the respect from both parties of detailed policies, plans for the future and the decisions that need to be made in order to fund those. That is the real choice.

TONY JONES: Yes, but it's obvious that electoral strategists look at the polls and in particular they look at their internal party polling; they wouldn't do it otherwise. The reported party polling is very similar to the Fin' Review polling when it comes to marginal seats and in particular when it comes to the potential loss of seats in NSW. Will NSW be the big battleground for this coming election whose date has now been announced?

PENNY WONG: The battleground for this election will be with - in competing visions for the future and competing plans for the future. And we've laid ours out. We're going to have an industry statement. This is all about ensuring jobs and opportunities, economic management in a time of volatility in the global economy.

We're committed to a National Disability Insurance Scheme and we are committed to lifting the standards in our education system and to investing more greatly into the educational resources for our children. This is the battleground for the election.

TONY JONES: Alright. But there are battleground states. NSW is clearly one of them. Those polls must have scared the hell out of an awful lot of MPs and here's Julia Gillard taking the attention away from it today by doing what no prime minister has ever done, announcing an election date eight months out from the actual election.

PENNY WONG: You know, Tony, I think it's interesting both you yourself and many other journalists and many people I suspect watching this program have bemoaned the fact that there's not enough attention in national politics on policy, not enough attention at a time of great change in our nation and globally on the policies for the future. And yet what you're doing in this interview is consistently asking me a process question which I don't agree with and the premise of which I don't accept. I think the Prime Minister's done the right thing.

TONY JONES: You don't accept there's trouble for Labor in NSW?

PENNY WONG: No, I don't accept that this decision is a decision driven by the reasons that you're postulating. I think this is a decision driven by a desire for a greater focus on respective plans for the future. We're up for that discussion and we're up for that debate.

TONY JONES: Alright, let's start having that discussion. Julia Gillard said there will be new structural savings. There will have to be to pay for the Government's big spending on disability and education reforms - her education crusade as she's now calling it.

Do you agree that in order to pay for Labor's planned winners that inevitably there are going to have to be losers, one group of the community is going to have to lose in order to pay for this?

PENNY WONG: Well, as Finance Minister what I say is this: if you're going to put more structural spending into the budget - and what do we mean when we say that? We mean spending that we know is locked in over time; for example, more spending and more investment in schools.

If you're going to do that, you have to make some structural savings as well otherwise your budget position becomes untenable, not so much in the near term, but in the medium and the longer term. And that is what the Prime Minister's saying.

You have to ensure you have a structural savings strategy in order to make sure you have the room to fund your priorities such as national disability and education.

TONY JONES: Alright. But inevitably, that means there are going to be losers in this equation because someone's going to have pay for this, isn't that right?

PENNY WONG: There's no costless policy except perhaps in Mr Abbott's world and his world of real solutions without cost. But, we ...

TONY JONES: Well who are the losers going to be? It's a fundamental question that's going to define the election.

PENNY WONG: I think that's right. I think - well I think - I think what will define the election is a question of values and priorities and plans. I think that will define the election and it should. But you can get - you can glean some sense of the sort of approach Labor takes from the savings we've taken to date.

The private health insurance changes opposed by the Opposition, I'm sure controversial for some people in the community, but we were upfront with people and we said it is not sustainable to have the private health insurance rebate designed as it currently is.

We removed various tax breaks like the dependent spouse tax offset. We removed golden handshakes, changed the fringe benefit tax arrangement. These are the sorts of structural savings measures we've taken and they will - are yielding benefits to the budget now, but more importantly, they'll continue to yield benefits to the budget in years to come to enable the room to fund other priorities. So that is the sort of approach ...

TONY JONES: Right. That is precisely the point. If that is the sort of approach, what it really means is unwinding what is commonly known as middle class welfare initiatives. Will you be unwinding many more of those as a matter of principle? Is that where you will make your savings?

PENNY WONG: Well budgets are about priorities and whilst I don't intend to announce the May budget on Lateline here tonight ...

TONY JONES: Sure, but we're talking here not about individual cuts, but about the principle you're going to apply. You've hinted that it is going to be the same sort of cuts that the Prime Minister and you just talked about which are cuts to middle class welfare. Are we going to see more of that?

PENNY WONG: I think you what will see is an approach which is guided by principles of fairness. And I think we have shown that in the budgets to date that the savings measures we have taken have been guided by principles of fairness.

I think it's been extremely dishonest for some people in the Opposition to label these things class warfare or even more - an even more silly criticism which was Joe Hockey suggesting the changes to the baby bonus were akin to the one-child policy in China. I mean, these are ridiculous propositions.

But as Finance Minister I can say this: there's no easy savings measures. You have make decisions and those decisions do have to be guided by your values and your priorities.

TONY JONES: Yes. So, guided by your values and priorities, your Labor values, will the rich have to take a greater share of the burden? Is it simple as that?

PENNY WONG: Well, I've talked in general terms, but I think if I go any further, Tony, I suspect I'd have to start talking in the specific and that's - I'm very happy ...

TONY JONES: Well, no - we're talking here about a philosophy, the guiding philosophy. Will the rich have to take a greater share of the burden? Will they be essentially the losers?

PENNY WONG: I think fairness is an important not just Labor value, but Australian value. As is the principle of sustainability, making sure we can fund the things we want for our children not just next year but in the decades ahead. They are important principles. They're principles we've applied to date and they'll be principles we continue to apply.

TONY JONES: It sounds very much like and in fact it seems pretty clear that you're planning a further assault on so-called middle class welfare. How will you convince voters that that is not an assault on the middle class per se?

PENNY WONG: Well, first, I don't think it's an assault that we're proposing. What we're doing is without spin, without artifice, without the sort of meaningless slogans we see too much particularly from Tony Abbott, we're saying - we will say very clearly we do have choices to make.

I think all of us would want a better set of resources in our education system. All of us would want a better education for our children. There's a personal imperative around that; that's what we want, but there's also an economic imperative that we need to be competitive in the Asian century and that means increasing the skills level of our population.

TONY JONES: But it begs the philosophical question: who is the middle class? I mean, when you talk middle class welfare - because John Howard defined this very widely when he brought in these so-called middle class welfare initiatives. Who is the middle class? Where does it stop? Where do you decide if middle class welfare is being applied to the community, that it's gone too far? What's the principle?

PENNY WONG: Well which of the questions would you like me to answer, Tony? But, look, I'll answer the central question.

TONY JONES: Well what's the principle will do.

PENNY WONG: Yes, that's fine. Well, I think the only person who's talked about middle class welfare in this interview is you. What I've said is we will be guided by principles of fairness and you can construe that how you wish and I accept the construction that you've used is one that is commonly used.

But we have made decisions on the basis of fairness. For example, we have made the private health insurance rebate less generous for higher-income earners. We've made other decisions which have been less generous for high-income earners and we've made reductions in terms of the baby bonus.

Now, people can call those decisions whatever they like. I can tell you what the motivation is. The motivation is a sustainable budget position, fairness and being able to fund the things which we think and I think many people think are important for the economy and for the community.

TONY JONES: Are we going to get a Robin Hood budget which effectively takes from the rich to give to the poor?

PENNY WONG: I think you'll always see a Labor budget and Labor values in action in the decisions this government makes. And what I'd say to you is I think they're consonant, they're consistent with the values that many Australians hold.

TONY JONES: This is obviously a very difficult balancing act. Is there a risk that if you take away the kind of entrenched benefits that middle class people are getting in this middle class welfare, that you're going to hit aspirational voters, the sort of aspirational voters in outer suburbs that Mark Latham used to talk about?

PENNY WONG: Well I think that's the sort of hypothetical and commentary all in one question and I'm sure you can probably answer that in the way you wish. What I'd say is that we're being upfront with people and saying we want to fund a National Disability Insurance Scheme. It's the right thing to do.

We want to fund a greater investment in our schools. That's the right thing for our children, it's the right thing for the nation's economy.

But we can't do that unless we make some of these decisions and the sorts of decisions that we will make very clear in the budget. And that will put us I think in a very different position to Tony Abbott who will continue to mouth slogans.

But I think at some point Australians are entitled to the respect from a Leader of the Opposition who wants to be the Prime Minister of him showing how he will fund the policies he's putting forward or the plans he says he has.

TONY JONES: OK. We don't want to spend the interview talking about what the Coalition is doing, although the Prime Minister did that, Wayne Swan did it earlier this evening. Let's talk about what you're doing because the Opposition is saying if you're going to at a time when revenue is diminishing, $30 billion a year since 2008, fewer dollars to actually spend on these kind of policies, according to the Prime Minister.

In order to have big-spending policies you have to make big cuts and the Coalition is saying effectively you're going to raise taxes on some people.

PENNY WONG: Well, the Coalition are interested in an argument that involves slogans and fear campaigns. I think we've got that pretty clear. What we're interested in is a sensible, responsible discussion with the Australian people about choices and priorities and that's what they'll get from us.

TONY JONES: Well we can't really have that discussion, can we, until we know how you're going to do the spending. Even though the Prime Minister said today this whole decision was to take away uncertainty, the uncertainty it seems will continue all the way up to the budget until we actually know how you plan to pay for these policies.

Unless you have a staged-in way of doing that. I mean, how soon will we know, for example, how you're going to pay for the big, big ticket items in the Gonski review?

PENNY WONG: We'll certainly be accounting for them in the budget. And what I would say to you is this, though: you do already have a very different approach between the two parties. We have in every budget and every budget update detailed our savings decisions, detailed our spending decisions. And whilst you don't want me to talk about the Opposition, I think Australians are entitled to know Tony Abbott is promising lower taxes, higher surpluses and more spending. That does not add up.

TONY JONES: Here's one thing that families may consider they're entitled to know: they rely on the stability of their superannuation arrangements. Will super be quarantined from these cutting plans that you have?

PENNY WONG: Well, again, I think that's an invitation to announce the May budget on your program, Tony, and I'm not going to do that.

TONY JONES: No, it's a question of principle once again. I'm not asking you about any specific superannuation tax arrangement. I'm talking about in general will super be quarantined? Because people have the right to know what their superannuation arrangements are and whether they're going to remain stable.

PENNY WONG: Well, and as a matter of principle, Finance ministers don't rule in or rule out things in the lead-up to budgets and in the process of preparing budgets, so I'm afraid I'm not going to be changing that tradition, Tony.

PENNY WONG: Well, I'm saying to you in the tradition of Finance ministers, we don't do the rule in, rule out thing in the process of preparing budgets and I don't intend to do that tonight. What I will ...

TONY JONES: OK. Go ahead, go ahead.

PENNY WONG: Oh, I was just saying what I will say is we recognise the importance of a credible funding strategy and as the Prime Minister said, we are taking on that responsibility.

TONY JONES: Penny Wong, we await answers to quite a few questions still in this period where uncertainty is meant to have disappeared. But nonetheless, we thank you for being there on the first day of what appears to be the longest election campaign in history.